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A conservative approach to business has helped keep Iowa stable during the ongoing global recession, but a panel of economic experts said last week that it also will hinder the state’s growth when the economy starts to recover.

“I don’t think we want to brag about our lack of speculation,” said Meghan O’Brien, an Iowa State University Extension program specialist. Without the ups and downs created by risk-taking, “the long-term trend is lower.”

Iowa has ranked 47th in employment growth in recent years, noted ISU economics professor Peter Orazem. It’s the hotter markets that have crashed and burned during the past year, but “those markets with the fastest growth prospects will have the available space and labor supply” when business gets back to normal, he said. “We don’t have much excess capacity here. … Des Moines will be in a relatively weak position.”

O’Brien, Orazem and Andy Warren, the managing director for research at Principal Real Estate Investors, spoke at the Business Record’s annual Commercial Real Estate Trends and Issues Forum at Courtyard by Marriott Ankeny on April 14.

The breakfast audience heard Warren predict that it will be late 2010 before the commercial real estate market perks up. “There are signs in the economy that we’re near the bottom,” he said, “but real estate lags other segments by one or two quarters. We have another one or two quarters of sharp declines.”

Warren said the good news in the commercial sector is that “the supply was relatively well-controlled. There’s not a lot of space to be dumped on the market. If we get significant demand in late 2010, it should eat into the available space fairly rapidly.”

In response to a question, Warren said, “I think securitized lending will come back at some point.” It’s a practice that gets much of the blame for the worldwide financial woes, and he said the mechanics of the process will have to change. “I don’t think the market will accept bundling up mortgages and passing them along,” he said.

Orazem said securitization has “immense value” and suggested a way to improve the practice and perhaps benefit some Des Moines-based companies at the same time. The industry needs a “financial intermediary” to value projects, replacing the institutions that failed in that role, he said.

“If insurance companies can figure out how to serve that role,” Orazem said, “the market will be very large.”